An open letter to Groupon:

$6 BILLION dollars wasn’t enough? $6 billion, with a “b”. The YouTube guys got $1.6 billion back in 2006 and they seem perfectly content padding around the mansion in gold plated bunny ear slippers. $6 billion buys a lot of Skittles and beer.

Here’s why you’re going to look back on this in a few years and wonder how you could have been so short sighted.

1-      Your business model has a very low barrier to entry. I currently subscribe to your emails and Living Social’s emails. The other day a 3rd email newsletter normally not geared to coupons had a social deal in it. Anyone can get in on this game. Expect a dozen competitors in your space by the end of 2011 including….

2-      Google. You teased and poked the bear, he’s awake, he’s pissed and he’s hungry. Scorned, Google is building out their own coupon / social platform. I’m sure you heard. Combining their 70% search market share with a decent user interface and you’ll never compete with the variety and specifically targeted deals they could come up with. They know that I search for Mexican restaurants in zip code 10003 on Wednesdays – BOOM! A perfectly tailored deal for half off a pitcher of margaritas is sent to me. Do you know what kind of deals I would like to increase my take rate? Clearly not, because your deals are 93% girly stuff I would never buy. I remember even telling you I was a dude when I signed up and yet you keep serving me coupons for spa treatments and stretch mark removal services and pole dancing classes. Dude, I’m A DUDE!

But Google is not infallible. Let’s say that they screw it up and their proprietary platform goes nowhere like Google Video or Buzz or Wave. They have so much cash they’ll just buy up all the coupon sites that did get it right and infuse them with enough cash to crush you. What do you think $6 billion smells like? Imagine what it smells like because that’s as close as you’re going to get to that kind of money again.

3-      The internet has a short memory and a hugely inflated sense of worth. This past summer Lycos was sold for the 3rd time. Remember Lycos? No? It was a search engine. A search engine that sold for $12.5 billion in 2000, $95 million in 2004 and recently sold again for $36 million.  I suspect in 3 years time Groupon will be spoken in the same breath as Alta Vista, Friendster, MySpace and pets.com.

You’ve got moxie, Groupon. I have to give you that. But I think you watched The Karate Kid a few too many times, because often in life the little guy doesn’t win.

Good luck,

Chris.

Omniture, WebTrends and Google Analytics = Ford, Chevy and Chrysler.

What kind of car did you learn to drive with? For me, growing up in the country, I learned to drive on a Ford F-350 flatbed truck with 4 wheel drive and a manual transmission with 6 forward gears and two reverse. It was big, loud, powerful and dirtier in the cab than it was on the fenders. You might have learned on the family sedan, a Chevy perhaps. But once you learn to drive a Chevy does that mean you can only drive Chevys? Of course not. If you can drive a Chevy you can drive a Ford, a Toyota or even a Bentley.

It’s the same with web analytics packages. But short sighted managers and HR departments don’t see it that way.

I’ve used Omniture, WebTrends and fooled around with Google Analytics on this site. If I know how to track and analyze an email campaign in Omniture I can do it in WebTrends even if I’ve never seen the package before. It’s the concepts that matter, not the interface.

But I’ve spoken with recruiters, managers and HR reps that absolutely insist you have X years working in analytics package Y. That’s dumb and limiting the pool of candidates. So, this is a plea to those who are the hiring decision makers (almost used ‘deciders’, couldn’t do it): open your minds. A good analyst is someone who finds insights, pulls learnings from obscure data and deeply understands KPIs. It’s not someone who is familiar with a particular software’s interface.

Start hiring smart.

Monkey in the middle, money on the outside.

To efficiently utilize email marketing you need to use templates. Sure, it would be great to have a glossy customized email for every campaign, but for many companies that’s simply not feasible.

I recently worked with an email marketer on a test of her template. We wondered if the principle of KISS (keep it simple stupid) was more effective than the product smorgasbjord. In other words, was an email with a few products guaranteed to be above the fold more effective than having an email with many products displayed some of which would require the end user to scroll.

The results were suprising.

In the control email the products were aligned in a single row. 5 products in all. In the test email the products were in 3 rows each row having 5 products greating a grid of 15 products. Not only was the email with 15 products more successful in terms of conversion events but we found that the products at the ends of rows and at the bottom of the email got more clicks.

Our users (results may vary) scanned the entire email and clicked more on the fringes of the product grid and the bottom of the grid than the middle. Even more suprising was that the products in the middle (the ones clicked less) were big sellers. The products on the fringes were unknown duds.

The resulting conclusion was that in future uses of this template it’s important to put higher margin products on the outside edge and bottom right of this particular template. That maximized clicks and profits and that’s why we do what we do.